| John Bosman | 592 words
Commercial insurance premiums fell in the first quarter of 2026 — a 1.2% average decline across every account size, the first time that’s happened in nearly nine years, ending a 33-quarter streak of increases. But “the market is softening” isn’t the whole story: commercial property dropped 5.5%, while commercial auto climbed another 5.8% for its 59th consecutive quarterly increase. Whether this is good news for your renewal depends entirely on which lines of coverage you carry. This page breaks down what’s actually happening, line by line.
Short answer
The commercial insurance market turned soft in Q1 2026, with average premiums falling 1.2% across all account sizes for the first time in nearly nine years. But the shift is uneven: commercial property is seeing real relief (down 5.5%), several liability lines are also declining, and commercial auto is still climbing (up 5.8%, its 59th straight quarterly increase). Whether softening helps your renewal depends on which lines of coverage make up your policy.
Reader checkpoint
- Which lines make up most of your premium — property and liability lines that are softening, or commercial auto, which is still rising?
- Has your underwriter mentioned expanded capacity or more flexible terms at your last renewal, or is your policy still being priced like it’s 2023?
- If your rates haven’t moved despite the broader softening, do you know why — and is it worth a second opinion?
Quick answer
Market softening in 2026 isn’t uniform — it’s heavily concentrated in commercial property (down 5.5%) and several liability lines, while commercial auto keeps rising for a 15th straight year. The practical takeaway: if your policy is mostly property and general liability, this is a good time to negotiate or shop your renewal. If it’s mostly commercial auto, don’t expect the same relief.
At a glance
| Main Issue | The commercial insurance market turned soft in Q1 2026 for the first time in nearly nine years, but the relief is concentrated in specific lines — property and several liability coverages — not across the board. |
|---|---|
| Common Blind Spot | Assuming “the market is softening” applies evenly to your policy, when commercial auto is still rising (up 5.8% in Q1 2026, a 59th consecutive quarterly increase) even as property and other lines decline. |
| Useful Document | Your current policy broken down by line of coverage, so you can compare which parts of your premium are in a softening line versus a still-hardening one. |
| Best Next Step | Ask your agent for a line-by-line renewal comparison — don’t assume a single “market is softening” headline applies to every coverage on your policy. |
Defined Q&A
Understanding Market Trends: Is the Commercial Insurance Market Softening?: common questions
Why is my premium still going up if the market is softening overall?
Market softening is uneven by line of coverage. If your policy is weighted toward commercial auto, general liability, or umbrella, you may still see increases even as the overall average declines. Commercial auto in particular rose 5.8% in Q1 2026 — its 59th consecutive quarterly increase — regardless of what’s happening in property or other lines. The overall -1.2% average doesn’t mean every line is declining.
Which lines of coverage are actually seeing rate relief right now?
As of Q1 2026, the lines seeing the most relief are commercial property (down 5.5%), workers’ compensation (down 3.7%), cyber liability (down 3.5%), D&O liability (down 2.1%), and employment practices liability (down 1.8%). General liability and umbrella are still rising, though more modestly. Commercial auto is the outlier — still up 5.8%, with no sign of a reversal.
Is this a good time to shop my commercial policy, or only certain parts of it?
It depends on your coverage mix. If your policy is primarily commercial property and general liability, this is a better window than 2022–2025 — carriers are competing more aggressively and capacity has expanded. If your policy is heavily weighted toward commercial auto, the softening market doesn’t apply to that line. Either way, asking for a line-by-line renewal comparison is more useful than relying on a general “market is softening” headline.
If one part of this topic felt familiar, start there. Ask for a line-by-line breakdown of your renewal instead of a single overall number — the market’s softening unevenly enough right now that the average doesn’t tell you much about your specific policy.
The market genuinely turned in Q1 2026
For nearly nine years, commercial insurance premiums moved in one direction: up. That streak ended in the first quarter of 2026. According to The Council of Insurance Agents & Brokers’ Commercial P&C Market Index, average premiums across all account sizes fell 1.2% in Q1 2026 — the first broad-based decline since 2017, and a sharp reversal from the 0.2% average increase recorded just one quarter earlier. Large accounts (over $100,000 in annual commissions and fees) saw the steepest relief, down 2.7% for the second straight quarter. Small accounts were the only segment still seeing increases, though even that pace slowed to 1.1%, down from 2.8% the quarter before.
Commercial property is leading the relief
No line softened faster than commercial property, which fell 5.5% in Q1 2026 — a sharp acceleration from a 0.7% decline the prior quarter. The shift is being driven by real competition: 72% of surveyed brokers reported increased underwriting capacity from carriers, some describing it as significant. Loss performance backs up the pricing shift — AM Best data shows the commercial property loss ratio improved to 85% at year-end 2025, down from 87.9% a year earlier, even after early-2025 California wildfires and an active severe convective storm season. If your policy leans heavily on property coverage, this is a genuinely good time to have a renewal conversation.
Commercial auto is the exception, not the rule
Not every line is softening. Commercial auto rose another 5.8% in Q1 2026 — the largest increase of any line, and the 59th consecutive quarter of increases for that coverage. AM Best has called commercial auto “one of the worst-performing P&C segments over the last 10 years,” with loss ratios above 100% in every year since 2014 except 2021, and net underwriting losses exceeding $5 billion in both 2023 and 2024. Distracted driving, congested roads, social inflation, and rising repair costs tied to vehicle technology are all cited as ongoing pressures. If commercial auto makes up a meaningful share of your premium, don’t expect the same relief that property and liability lines are seeing.
Where the rest of the market stands
Several other lines joined property in declining during Q1 2026: cyber liability (down 3.5%), workers’ compensation (down 3.7%), D&O liability (down 2.1%), and employment practices liability (down 1.8%). A few lines are still rising, though more modestly than auto — general liability (up 2.6%) and umbrella (up 4.8%). Surety bonds held flat. Taken together, the average change across all lines combined was -0.3% in Q1 2026.
What this means at your next renewal
The right move isn’t to assume “the market is softening” applies evenly to your policy — it’s to find out which of your specific coverage lines are actually softening and which aren’t. A property-heavy policy has real room to negotiate right now. A policy weighted toward commercial auto is still facing upward pressure regardless of what’s happening industry-wide. Either way, going into a renewal conversation knowing the line-by-line breakdown puts you in a stronger position than going in with a general sense that “rates should be coming down.”
What to do next
Use the related tool or ask for a review before you make coverage changes.
Commercial Renewal Readiness Score | Start a Coverage Review